The aim of the Federal Act on the Import of Processed Agricultural Products (SR 632.111.72) is to compensate for the raw materials price disadvantage faced by the Swiss food industry when importing processed agricultural products, such as chocolate, sponge cakes and baby food. To achieve this, duties consisting of variable components are levied on imports. These increase the price of the basic ingredients in the imported processed products to the domestic level. They also reflect the differences in basic agricultural product prices between the Swiss and foreign markets. Customs tariffs for processed agricultural products are set mathematically on the basis of reference prices for the basic ingredients concerned. Export duties levied under the old ‘Chocolate Act’ (Federal Act on the Import and Export of Processed Agricultural Products) were lifted with effect from 1 January 2019.
The Federal Act on the Import of Processed Agricultural Products also implements the treaty conditions of Protocol 2 to the free trade agreement between Switzerland and the EU (SR 0.632.401.2). This governs the price equalisation mechanism in trade with the EU. Revised in connection with the second round of agreements, Bilateral Agreements II, Protocol 2 takes into account the difference between Swiss prices and lower raw materials prices in the EU (i.e. net price equalisation) rather than the difference between Swiss prices and even lower prices on the global market.